New Look says it's slashing 80% of items to below £20 in final attempt to save fashion empire

New Look is to slash costs throughout shops in a bid to revive income after a yr of plunging gross sales.

The enterprise – which is already set to shut 60 shops this yr – stated it plans to cut back 80% of inventory to £20 or much less.

It comes after the style empire reported an working lack of £74.three million within the 12 months to March 24 this yr.

In asserting its figures, New Look teased at a drastic turnaround plan to lure buyers again in with Boohoo-type costs.

Boohoo has seen gross sales soar previously yr – with income nearly doubling due to decrease costs

In an announcement, bosses stated it plans to supply “considerably higher worth with 80% of merchandise to retail underneath £20”.

It would additionally deal with “value-led quick style” and provide wardrobe fundamentals with a full value focus.

Chairman Alistair McGeorge stated: “Final yr was undoubtedly very troublesome for New Look, with a well-documented mixture of exterior and self-inflicted points impacting our efficiency.

“Since November, we’ve centered on making the required adjustments to get the corporate again on monitor and reconnect with our clients.

“Our turnaround plan is now effectively underway, and we’ve already made substantial operational enhancements to assist stabilise the enterprise, scale back our fastened price base and put us in a greater place to drive future full value gross sales.”

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Is New Look too costly?


Client web site, VoucherCodesPro stated the value promise has the potential to “seize consideration” from misplaced, cash-strapped buyers.

“Right this moment it has been introduced that New Look needs 80% of its garments to promote for underneath £20 because of plunging gross sales, each on-line and in-store,” spokesman George Charles stated.

“It is undoubtedly going to seize extra consideration from potential clients and we may effectively see an enchancment due to this tactic which is a rarity when information comes out {that a} enterprise is struggling.

“Not solely are they eager to make the vast majority of their items cheaper, which appeals to probably the most primary cut price hunter in all of us, however they’re additionally widening their age demographic to 18 – 45. We hope that New Look could make this work – it’s going to be unhappy to see one other excessive avenue title disappear.”

Drastic motion

New Look joins a string of companies taking motion in a yr of disaster talks for the excessive avenue

New Look’s gross sales within the UK fell by 11.7% on a like-for-like foundation – whereas whole income was £1.34 billion, down from £1.45 billion yr on yr.

The enterprise stated it was hit with a £34.2 million one-off price, which included an distinctive cost from inventory clearances.

Earlier this yr, introduced plans to axe 60 shops and scale back hire in an additional 393 branches.

It is a part of a Firm Voluntary Association (CVA) – a process that allows companies in debt to repay debt whereas buying and selling – in an effort to stop it from closing fully.

In whole, it is estimated the choice may result in as many as 980 job losses, though New Look stated it plans to redeploy employees the place doable.

If income aren’t revived, New Look may observe within the footsteps of BHS and Toys “R” Us
(Picture: Getty Photos Europe)

The checklist consists of its flagship Oxford Avenue retailer in London.

New Look chairman Alistair McGeorge stated: “To be able to assist restore long-term profitability, it’s clear we have to scale back our fastened price base.

“Along with implementing different cost-saving initiatives, we’re already specializing in driving future full value gross sales by realigning our pricing to supply considerably higher worth, including flexibility to our purchasing mannequin, and bettering our velocity to market.”

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Excessive avenue closures

The poor buying and selling information comes after Home of Fraser proposed a CVA, saying it supposed to close 31 shops , placing 6,000 jobs in danger.

Mothercare and Carpetright have additionally undertaken CVAs up to now this yr in a bid to save lots of on prices.

Torrid buying and selling on the excessive avenue has triggered a swathe of retail failures, with Toys R Us, Maplin and Poundworld all coming into administration.

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